Comparing China's Financial System

Comparing China’s Financial System

We compare China’s financial system to those of the developed countries, in particular, the US system dominated by financial markets, and the German system dominated by the banking sector. We examine financial systems’ properties, including risk sharing, information provision, funding new and mature industries, financial crisis, corporate governance, and the relation between the financial and l...

Comparing in Financial Intermediation

We explain informed capital by showing that projects can be screened by comparing loan applicants. Because efficient comparing requires centralized monitoring, it represents a novel rationale for financial intermediation. Positive scale effects may make a single monopoly intermediary optimal. Comparing can also eliminate the problems of adverse selection and inefficient investments.

Monitoring Financial System Stability

Integrating Islamic Finance to Global Financial System: the Role of the Islamic Financial Services Board (IFSB)

A prudential framework is an important element in facilitating the successful integration of Islamic financial services to the global financial system. In recognition of this need, various stakeholders decided to establish the Islamic Financial Services Board (IFSB) to spearhead the development of a uniform set of prudential, supervisory and disclosure standards for the Islamic financial s...

The role of comparing in financial markets with hidden information

This paper studies how comparing can be used to provide information in financial markets in the presence of a hidden characteristics problem. Although an investor cannot precisely estimate the future returns of an entrepreneur’s projects, the investor can mitigate the asymmetric information problem by ranking different entrepreneurs and financing only the very best ones. Information asymmetry c...